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SUMMARY COMMENTARY

THE LIVING COST INDEXES

The Living Cost Indexes (LCI) have been designed to answer the question:

'By how much would after tax money incomes need to change to allow households to purchase the same quantity of consumer goods and services that they purchased in the base period?'

In the December quarter 2016, the living costs of pensioner and beneficiary households (PBLCI) rose 0.6%. Over the same period, the living costs of other government recipient households rose 0.7% and self-funded retiree households rose 0.6%. Employee households and age pensioner households both rose 0.3%. For more information about the December quarter 2016 results, see Main Contributors to Change.

These differences arise for a number of reasons. The inclusion of mortgage interest and consumer credit charges and the different treatments of housing and insurance costs in the LCIs result in variations between the LCIs and the CPI series. The expenditure patterns of those households measured by the LCIs differ from those of the overall household sector in scope of the CPI; these also contribute to differences in the percentage changes.

For a discussion of the relationship between the LCIs and CPI, see the Explanatory Notes.